The Blog

6 Essential Steps to Your Financial Breakthrough

By Miranda Marquit

So many of us wish our finances were better. Chances are, you’re hoping for a financial breakthrough — one that might not happen if you don’t do more than hope.

Instead, like so many things in life, success with money requires that you take action. It’s not always easy. In fact, there’s a good chance you’re facing some challenges in your life and with your finances.

But that doesn’t mean you can’t work toward a financial breakthrough. Here are six steps you can take to help you as you work toward taking the next step with your finances:

1. Figure Out Your Values and Priorities

One of the biggest barriers to a financial breakthrough is not understanding what you want. Yes, you want more money. But, why?

Sit down and figure out what you’d do with the money and why you want it. Decide on your values. Use those values to help you set goals, and prioritize those goals. Paying off debt might be your top priority now, but later on, after your debt is gone, you might want to save for retirement or start a business.

Visualize what you want your money to accomplish on your behalf, and you’re far more likely to stick with future plans and make better decisions about your finances.

2. Track Your Spending

Pay attention to where your money goes. If you want a financial breakthrough, you need to understand where you’re at right now. The first time I actually tracked my spending, I was surprised at how little purchases added up — and I was surprised at how much waste was in my budget.

Use a pen and paper or even download an app for your phone. Whatever you use, make it a point to record each time you spend money. Whether it’s for a bill you have to pay, or whether it’s for a $5 cup of coffee, write it down.

Do this for two to four weeks, and you’ll have a pretty good idea of where the money is going. Once you have that information, compare it to your values and priorities. Chances are, your spending isn’t helping you advance toward your goals.

3. Take Responsibility for Your Financial Future

You can’t stop bad things from happening to you sometimes. Through no fault of your own (or maybe only a small amount of fault), you might be stuck in a rough patch. I know I didn’t ask for my divorce, or to break my wrist just a few months after that.

However, how I responded in those situations made a difference in my future. I had tools at my disposal to help me move forward. Look at your own life. What tools do you have available to you as you work to move forward?

Rather than getting caught in the past, worrying about mistakes or misfortunes, look to the future. Decide that you’ll start working for that financial breakthrough and that you’ll whatever tools you have available to you in order to make progress. Progress might be slow at first, but it’s still progress.

4. Make a Plan

Create a plan to help you reach your goals. Once you know your values and priorities, and understand where you’re at financially, you’re ready to make a plan. Sit down and think about the steps you need to take to reach your goals. A financial breakthrough is rarely something that happens overnight. Instead, it’s often the work of months — or even years — as you follow a plan.

Write out the steps you need to take to succeed, and then start on the first step as soon as possible. Break your plan down into manageable steps so that you have a realistic projection of progress. As you move forward, you’ll be surprised at what you can accomplish.

5. Surround Yourself with the Right People

One of the biggest challenges many of us face is getting bogged down by the people around us. You might be trying to live frugally, but your friends keep pressuring you to come out to expensive restaurants. Or maybe your family ridicules the idea of you going back to school to get a degree that will help you make more money.

Look for people who share similar financial goals and priorities so you can encourage each other. This doesn’t mean that you have to ditch people who don’t share your financial values, but it does mean that you also need to balance that out with supportive friends who can help you stay on track.

Not only that, but it can also help to look for financial professionals. Financial planners, mentors who have achieved what you hope to accomplish, and others can help you figure out the best way forward.

6. Tweak the Plan as You Go

Finally, a financial breakthrough requires some flexibility. Your goals might change. New challenges might force you to make small (or even big) changes to your plan. Be sure to tweak your plan as you go, but don’t lose sight of your why. Remain true to your values.

Your financial breakthrough is likely to come gradually, as you follow these steps. One day, though, you’ll look around and realize you’re in a much better financial situation, and almost be surprised that it happened.